Is the Gold standard Unconstitutional?Submitted by StaxBrix on Fri, 08/21/2009 - 22:40
I agree with a lot of what Ron Paul has to say about the constitution, and politics. I have nothing against the man personally or his foreign policy at all, but I've come to understand that his Economic policy would be detrimental to this country not just because it would not create any kind of monetary reform, but because his economic policy is unconstitutional.
Ron Paul is an Austrian Economist, and The Austrian Economist believes that the market should regulate the market. You'll notice that whenever something goes wrong Ron Paul will blame the government for America's problems. When the FED spends 24 Trillion dollars, Ron Paul blames the Government. When the private sector creates 1.5 Quadrillion dollars in worthless debt based securtized assets, Ron Paul blames the Government. When the President imposes outright fascist policy, he again points his finger at the Government and calls it socialism. The government definitely deserves some blame, but to blame the government exclusively for corruption is ignorant of what is really going on. Most of the laws passed in washington today are lobbied for by corporations and banks. Nobody denies that, but Ron Paul will rarely if ever mentions that corporations are involved. If he did he wouldn't be able to call it socialism, and he never mention that most of Americas debt comes from derivitives cause by deregulation on the market. If he did talk about Derivatives people would understand that the market is not perfect and that you can't let it Regulate itself.
“The free market doesn't mean Wall Street should be free to steal from the American taxpayer. It's a free market, not a spree market.”
Ron Paul is also a supporter of the Gold Standard, which I would be for if not for two things. One There is not enough gold in the world to create gold standard for 300 million Americans. You can find out more about that here:
And two because it's unconstitutional! Now why is the Gold standard unconstitutional? Well lets look at the constitution. Section 8 of the constitution, which says what the powers of congress are gives congress the power
Quote from: Section 8 constitution
“To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
What part of that makes the gold standard unconstitutional? Lets ask Ron Paul...
“Under the gold standard, the supply of money regulated itself. The government kept within limits. Banks were more cautious. Savings were high because credit was tight and saving was rewarded. This approach to economics is the foundation of a sustainable prosperity.”
Ron Paul- Abolish the Federal Reserve
You notice when reading this article that just before this paragraph Ron Paul quotes the constitution and says that the constitution gives congress the power coin money and to regulate the value of the currency, but with gold standard congress cannot control it's value because the value of gold is already set in stone, so to speak. In that system congress can never do the job the constitution gave them which is to regulate the value of the currency In the interest of the American people.
Now your going to love what I've found out about What ending the fed would do to the economy. Here's a little history lesson on Andrew Jackson.
In the Panic of 1837, the stage had been set for depression by outgoing President Andrew Jackson's and Secretary of the Treasury Roger Taney's abolition of the Second Bank of the United States, by their cultivation of the state "pet" banks, by their imbecilic Specie Circular of 1836, which demanded gold payment to the federal government for the purchase of public lands, and by their improvident distribution of the Treasury surplus to the states. London's ultimate weapon turned out to be the Bank of England bank rate. With all the American defenses sabotaged, the Bank of England sharply raised its discount rates, sucking gold specie and hot money liquidity back across the Atlantic, while British merchants and trading houses cut off their lines of credit to their American customers. In the resulting chaos, not just private banks and businesses went bankrupt, but also the states of Mississippi, Louisiana, Maryland, Pennsylvania, Indiana, and Michigan, which repudiated their debts, permanently impairing US credit in the world. Internal improvements came to a halt, and the drift towards secession and civil war became more pronounced. - Webster Tarpley - AGAINST OLIGARCHY
The fact is that that the Federal reserve is currently the engine of the world economy. Nations around the world hold dollars in reserves. If the Fed was suddenly abolished the engine that drives the dollar would implode and any banks that have dollars in reserves would be forced to sell dollars for other currencies. At that point what is there to buy gold for a gold standard with? Will you just get the gold for free? Or will you buy gold from other countries at interest and become a debt system again? Not to mention what will the IMF and world bank do if the Federal reserve was suddenly gone? Will we go to the SDR (The world currency)?
This is a very serious issue and it's why I'm for nationalizing the fed with The American Monetary Act rather than abolishing it. This is the only way to return the control of money to the American People.
I'll follow this up with a history lesson on usury and the gold standard soon